On Wednesday, the Federal Reserve cut interest rates for the third time in as many meetings. The last time that happened was 1998.
The Fed cited U.S. gross domestic product growth below 2% and ongoing trade war concerns as reasons for the latest cut. It wants to help stimulate economic growth.
And they said that the latest rate cut is actually bullish.
After all, if you look back, stocks have gained 20% in 12 months, on average, following three consecutive rate cuts.
In today’s five-minute Market Insights, Jeff and Mike discuss why Wednesday’s rate cut means stocks will continue to go up and make new highs.
They talk about:
- Interest rate cuts are helping the economy by making money incredibly cheap. Quote: “The Fed is doing all it can to boost stock prices. It’s really trying to keep this bull market alive. And it’s actually trying to keep the economy alive.”
- The S&P 500 Index hit an all-time high this week despite the trade war and other concerns. Quote: “Eighty percent of companies are beating earnings expectations. That’s bullish. It’s really hard to find the catalyst for this bear market that everyone’s so worried about.”
- As long as prices keep moving up, it’s still a good time to buy stocks. Quote: “New highs are bullish. … So until we’re in a downtrend, we’re in an uptrend. And that means buy.”
November historically kicks off the best six months of the year for stocks. So there’s never been a better time to subscribe to our Market Insights videos and get all of our experts’ latest analysis.
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Assistant Managing Editor, Banyan Hill Publishing
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